Saturday 1 November 2008 20.01 EDT
First published on Saturday 1 November 2008 20.01 EDT

Marks & Spencer is relying on stars such as Take That and Robson Green to win back disillusioned female shoppers this Christmas after its clothing market share losses accelerated over the last quarter.

The waning appeal of M&S's womenswear comes at a time when its food business is also in trouble. Executive chairman Sir Stuart Rose is due to report that first-half profits are down more than a third, at £290m, on Tuesday.

M&S is the UK's biggest women's clothing retailer but according to industry figures its market share by sales value has declined sharply since July. The data, which plots sales over the 26 weeks to 7 September against the same period a year ago, also shows that menswear is down, but not as markedly. It revealed strong gains in childrenswear.

The deterioration is likely to have informed M&S's decision to launch a new clothing brand called Portfolio, aimed at women over 45, next year. Some analysts fear M&S has alienated this core demographic as it sought to broaden its appeal.

This week's results meeting will be key to restoring faith in Rose's leadership as M&S heads into the Christmas trading period. He had been credited with the turnaround of the retailer but its recovery proved to be a false dawn. Last year's poor Christmas trading was followed by weak sales this year. The retailer also upset investors by ignoring corporate governance rules and promoting Rose to executive chairman this summer.

The reversal of fortunes has weighed heavily on M&S shares, which have collapsed from 652p a year ago to just 219p. The decision to pursue a multi-billion-pound store refurbishment programme has also been condemned by analysts, who have pencilled in full-year profits of £667m, far short of last year's £1bn. Indeed, many analysts now predict M&S will be forced to disappoint its legions of small shareholders by slashing its dividend next year.

M&S will launch its Christmas offensive next week with starry ads featuring Take That as well as its roster of models including Twiggy and Erin O'Connor. TV actor Green will lend his voice to a food campaign showcasing festive treats such as 'mini' melt-in-the-middle Christmas puddings. 'Customers are looking for tradition and comfort this Christmas and we are trying to appeal to the way they are feeling,' said M&S marketing director Steven Sharp.

However, the Christmas trading environment promises to be cut-throat this year as retailers look to serve customers who, for the first time in a decade, feel poorer as the country stares down a recession. Debenhams' chief executive Rob Templeman said consumers had already begun buying presents as they looked to spread the cost. Templeman warned that he wasn't afraid to start a high-street price war, stating it would 'invest margin' in tactical price cuts if the run into Christmas proved tough.

Beyond Christmas, analysts are worried about the long-term health of M&S's food business, which is suffering as consumers trade down to discounters like Aldi. M&S head of food John Dixon said it had been demonstrating its value credentials with offers like 'Dine in for £10', adding: 'We are confident customers will still want to treat themselves this Christmas.'

He said 'no decision' had been taken on whether to roll out branded goods to all stores. The retailer broke with tradition in July by introducing hundreds of products like Fairy Liquid and Tetley tea in 19 stores. One supplier said the trial had hit targets but that there was 'internal politicking' as to whether it should become policy.